When making any decision, there are uncertainties. This especially holds true in business situations. Once we identify what uncertainties exist in any situation, it becomes a risk. Risk is the product of uncertainty. Knowing that risk exists, how do we protect against it?
Although it is extremely difficult to simplify a complex subject, in essence, this is what the study of risk management is about. At Rotman’s Master of Financial Risk Management (MFRM) program, we’re committed to teaching students how to identify and manage risks.
Developed by some of the world’s most renowned thinkers in the field of finance, the MFRM curriculum is custom designed to answer the questions relevant for today’s financial issues. It has incorporated many complementary courses. The focus of the program is to provide students with the knowledge they need to know in order to succeed in the risk management industry and taught by world renowned faculty.
The core courses such as market risk, operational risk and credit risk that are built into the curriculum provide MFRM students the foundation of understanding the sources of risk. Professor Tom McCurdy, Founder of the BMO Financial Group Finance and Research Lab, points out that once students have a working knowledge of where risk comes from, we can challenge them to understand how to make good decisions when managing those risks. To do so, they will practice applying theory in cases which simulate the risks and opportunities relevant for particular securities or strategies. Students will derive effective decision strategies using multiple replications of those cases.
Model Based Learning
One way to understand how and why historical events occur is to create models and attempt to replicate the results. By using models, it’s even possible to consider scenarios that haven’t happened before and estimate the probability of a particular event to occur. This is known as probabilistic thinking. We can change one variable in the model and observe what the impact of this change was.
Applying these models using the Rotman Interactive Trader (RIT) simulation cases provides students with a great learning tool to understand the impact of decisions.
Is the MFRM Right For You?
Professor McCurdy suggests that “When considering whether the MFRM is right for you, consider what you need to round out your skills.”
Typically, students who come from a business or commerce background have a strong understanding of financial markets. What the MFRM can offer to these students is an opportunity to further develop their quantitative abilities to help guide their decision making.
Students who pursued undergraduate degrees with a heavier emphasis on quantitative reasoning such as mathematics or engineering who want to be challenged by real world business problems will also find the MFRM program appealing. These students will get a lot of value from learning which models are most relevant for financial risk management decision making and get an in-depth understanding of the financial industry.
The diversity in the classroom provides students with an opportunity to learn and build on each other’s strengths and work together throughout the program.
The Master of Financial Risk Management is a full time program designed to prepare ambitious young professionals for careers in risk management and finance.